This is how much sailing yachts cost.

Discussion in 'All Things Boats & Boating' started by Eric Sponberg, Sep 6, 2006.

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Eric SponbergSenior Member

Over the last five years, I have been tracking the costs of new production and custom sailing yachts as published in the US in some of the major yachting magazines. With over 150 boats in the database, I studied cost against various design parameters and found that cost plotted against length or displacement showed the clearest trends. Length is a better determinant than displacement, showing narrower divergence. For what it is worth, I post the graphs here.

Eric

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Crag CaySenior Member

Very interesting.

Your middle fit line on Cost/Length graph supports my assertion that boats double in price from 40 to 50 feet (360000 to 729000 USD).

Do you have any theories on how to make clients understand this? I'm sure the graphs will help, but I've found my cautionary advice is never as powerful as a wife's plea for a little more space in the galley / heads / lockers or his 'need' for a larger wheel, etc.

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AlikSenior Member

What if we plot (Cost/DISPL)=f(LOA)? I mean how the cost of 1 kg boat changes from length.

I used to tell the customer: we increase the length by 10%, the cost increases 30%. i.e. proportional to displacement. This is rough explaination. But sometimes the principle does not work if equipment is same

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Raggi_ThorNav.arch/Designer/Builder

Interesting indeed!
I did a simmilar comparision a few years ago and found that sail area was an important factor. It costs more to build a boat light and strong with a heavy keel and large rig.

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Eric SponbergSenior Member

Alik and Raggi_Thor,
I calculated Cost/pound and Cost/foot and plotted them against lenght and weight, and the data scatters all over creation--there are no recognizeable trends. Cost vs. Length and Cost vs. Displ. are the only parameters to see changes and trends clearly.

I also see and have known for a long time that a lightweight boat is more expensive per pound than a heavy boat because of the extra engineering involved, the extra care and talent required (higher hourly wages for the workers), and the more expensive materials needed. So a lightweight boat will be on the high side of the Cost vs. Displ. curves.

Crag Cay,
Most design clients don't have a very good idea as to how much a new boat will cost, and most have dreams of boats that are far beyond the sizes their wallets. That was why I started this study and plotted the results. I just posted an article on my website that discusses yacht design and construction and how the process works. I also address costs, using these graphs, and point out place where money can be saved. You can get to the article at www.sponbergyachtdesign.com, and click on "The Adventure Starts Here...." at the bottom under the photos of the boats.

Eric

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Crag CaySenior Member

That's a relief. I thought mine were singling me out for torment.

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GuillermoIngeniero Naval

Eric,
If I'm not wrong, there's a minor mistake in the COST/DISP curves, as at the formulas at the top, cost appears as a function of LOA instead of Displacement.
Cheers

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Eric SponbergSenior Member

OOPS!

I had to add the labels separately, and forgot to change the major variable!

Here is the correct graph!

Thanks for catching that Guillermo!

Eric

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MikeJohnsSenior Member

Eric

LOA is often misleading in the glossies, displacement is a good indicator.

There are presumably other factors at work here. The larger vessels will be aimed at a more sophisticated market than the lower end of the size range.

Looking at the used boat prices I often think the new prices for bigger boats are a bit over the top. I find it interesting that a new boat that currently sells around 1 million can be purchased for a third of that price when only a few years old but still in pristine shipshape condition.
It seems there is good market targeting at a certain sector of society with vessels that attract less interest from the ‘saltier’ used boat fraternity. Particularly when looking at boats aimed at the pretentious fraternity that simply want a floating condo.

Many smaller boats will be budget oriented and competing with a strong used boat market as well.

Always interesting to see what they fetch on the used boat market. I think it is a good indicator of base value to sale price.

cheers
Mike

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AriPatience s/o Genius

Mike,
In certain group of buyer it is tougher to sell a product at very low price and low profit margin, they won't buy. Normally the price need to be jack up a few times to make sales.The sales section study throughly the potential client market, data likes buying power, the needs,the dream, image carrying,the return from investment -ROACE return on actual capital employed, is very important to all coporate figures, this what sell the product, this very same datas are not important to certain type of buyer, normally in the lower profile group of targetted buyer.Knowing this very well..normally top of the line for any product will have a very big pricing gap with the one slightly in the lower rank.When come to used or pre owned market the product pricing is much more realistic.

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Eric SponbergSenior Member

I have found that length overall is actually a pretty reliable number, both in the magazines and when talking to clients--That is the one dimension that can't be hidden, and the one that people refer to most consistently and reliably when discussing a new design. Displacement can vary quite widely--is it the displacement at design, lightship, racing trim, full load--who knows. And designers and builders tend to keep their weights a moving target. So I always take displacement with a grain of salt.

The market will always pay what it thinks a thing is worth, regardless of its actual worth. I remember about 10-15 years ago, a very well known builder was marketing its brand new powerboat at the Newport Boat Show where it was a real hit. Customers were literally lining up on the dock to put down deposts. For each successive buyer, the sales people jacked up the price by \$10,000, and people were paying. The boat certainly did not gain that much in hardware or labor just sitting there, but it kept selling nonetheless. The boat still sells for a ridiculously high price, and there is not that much value in it.

Until this country does something about recycling its old boats, old boats will always compete against the new boats. And there seems to be a hint of interest across the continent to do something about it, but it will take at least a generation before the necessary infrastructure is built to handle it.

Eric

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marshmatSenior Member

It's interesting to note, Eric, that your regression curves for Cost/LOA are all somewhere between 3rd and 4th power functions, while I would have expected a simple 3rd power relationship. To me, this seems to confirm that big boats are not only larger, but tend to be fancier than small ones. The huge cost spreads in the bigger sizes seem to bear this out too- a very significant portion of the cost of many big yachts appears to be not boat, but luxury within it. For instance a 27-foot daysailer might have veneer-over-pressboard cabin work, while a 70' yacht would be more likely to have solid Honduran mahogany or some other fancy, labour-intensive interior.
I'm curious what the million-dollar 21-footer was!

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MikeJohnsSenior Member

Ari
I took a few marketing units at Uni 10 years back , some of the case studies were quite surprising ,some cars for example didn't sell until they added 40% to the price and targeted a wealthier sector. Funny what motivates people.

I think the NA's LOA is often not the marketers LOA, theres all sorts of extraneous overhanging gear that can find its way into the marketers LOA.
LWL and D always give me a much better idea of a boat .

Interstingly on your displacement comments don't you find that new boat marketers often tend to err the light side when it comes to displacement ? since it gives them better ratios (and often these days a better stability curve). I agree displacemnt is a bit nebulous but the scantling design displacement is a very good indicator of how much material has gone into the hull.

When it comes to the used boat market the descriptions of LOA are wild exageration . One case went to court here when the interstate prospective buyer sued the broker for the hardstand and survey cost when the advertised 65 foot vessels turned into a 55 foot vessel with a bowsprit and davits. They lost the case as the court accepted confusing practice on marketing of LOA and caveat emptor. So you can see why I wince at LOA .

Cheers

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GuillermoIngeniero Naval

Maybe LOD would be a better, and still easy to know, indicator?
Maybe LH, as per the RCD. It's becoming of widespread use troughout Europe.

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Eric SponbergSenior Member

The million dollar 21'er was a typo--should have been a 51'er, and that puts it just inside the red line. Sorry about that.

As for LOA, in the charts, the only thing I had to rely on was the published LOA, the marketers' LOA, for whatever it is worth. If the boat does have a long bowsprit or anchor platform, then you might see LOA AND Length on Deck, LOD. Certainly in dealing with clients for potential new boats, the one thing they really know is LOA, which is the net length of the hull. The second thing they know is draft, usually they want 6' or less of draft. All else is a little fluid, whatever it takes to make a comfortable boat that performs well.

You are right that the published displacement is more often much lighter than the actual displacement, whenever I have been able to investigate further. Certainly this was true ten years ago in the open classes for round the world racing. One never sees scantling displacement published, and it would be quite time consuming to try to track that down for each and every design. I had to rely on published data.

Eric

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